In a noncooperative pegged situation, when the home country devalues in response to an external shock the:
A) foreign nation will also devalue, endangering the peg.
B) home country suffers the entire burden.
C) resulting depreciation causes a large shift in demand from the foreign nation to the home country, thereby exporting the recession to the foreign nation.
D) nations agree to switch their peg to the U.S. dollar.
Ans: C) resulting depreciation causes a large shift in demand from the foreign nation to the home country, thereby exporting the recession to the foreign nation.
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Moving along the total product curve, which of the following is held constant?
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Patty spends $10 a week on bagels and soda. The price of a bagel is $2 and the price of soda is $1 a can. Patty buys 2 bagels and 6 cans of soda. Her marginal utility from bagels is 20 units
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